Neptune Orient Lines Ltd shares climbed to a record after UBS AG raised the stock rating on the operator of Asia's fourth-largest container-shipping line, citing a possible sale of its United States port terminals.
Smooth sail ahead? UBS raises NOL's stock rating to 'buy' from 'neutral' prompting its shares to jump 34 cents, or 8.4%, to $4.38 in S'pore yesterday
Neptune shares jumped 34 S'pore cents, or 8.4 per cent, to S$4.38 in Singapore yesterday. The stock, which has more than doubled in value this year, is the best performer among the 50 members of the Singapore Straits Times Index this year.
The possible sale by Neptune will follow Orient Overseas (International) Ltd, which last year sold four container terminals in North America to Ontario Teachers' Pension Plan, Canada's third-biggest retirement-fund manager, for US$2.35 billion. At least US$17 billion of terminals changed hands last year, including the US$6.8 billion purchase by a Dubai investment company of Peninsular & Oriental Steam Navigation Co.
'We believe management is evaluating the merits of a partial sell-down of terminal assets,' Alex Chang, UBS analyst, wrote in a recent report. He raised the stock rating to 'buy' from 'neutral,' and values Neptune's ports at $1.6 billion, or S$1.57 per share.
'This could be a catalyst for the share price, leading to a significant re-rating,' he wrote.
'This could unlock significant value, given strong investor appetite for port assets globally.'
Paul Barrett, Neptune's spokesman, yesterday declined to comment on the analyst report.
The rating change by UBS follows a similar upgrade by Credit Suisse Group on May 21. Credit Suisse rates Neptune shares as 'outperform' with a target price of S$4.20.
UBS' Mr Chang raised the price target of Neptune's shares to S$4.8 and also increased the earnings estimates for the current year and the next.
Neptune posted its smallest quarterly profit in four years in Q4, as lower rates eroded gains from higher volumes.
Net income fell 64 per cent to US$42.7 million from a year earlier. Sales were little changed at US$1.9 billion. That was the smallest profit since Q1 2003.
Smooth sail ahead? UBS raises NOL's stock rating to 'buy' from 'neutral' prompting its shares to jump 34 cents, or 8.4%, to $4.38 in S'pore yesterday
Neptune shares jumped 34 S'pore cents, or 8.4 per cent, to S$4.38 in Singapore yesterday. The stock, which has more than doubled in value this year, is the best performer among the 50 members of the Singapore Straits Times Index this year.
The possible sale by Neptune will follow Orient Overseas (International) Ltd, which last year sold four container terminals in North America to Ontario Teachers' Pension Plan, Canada's third-biggest retirement-fund manager, for US$2.35 billion. At least US$17 billion of terminals changed hands last year, including the US$6.8 billion purchase by a Dubai investment company of Peninsular & Oriental Steam Navigation Co.
'We believe management is evaluating the merits of a partial sell-down of terminal assets,' Alex Chang, UBS analyst, wrote in a recent report. He raised the stock rating to 'buy' from 'neutral,' and values Neptune's ports at $1.6 billion, or S$1.57 per share.
'This could be a catalyst for the share price, leading to a significant re-rating,' he wrote.
'This could unlock significant value, given strong investor appetite for port assets globally.'
Paul Barrett, Neptune's spokesman, yesterday declined to comment on the analyst report.
The rating change by UBS follows a similar upgrade by Credit Suisse Group on May 21. Credit Suisse rates Neptune shares as 'outperform' with a target price of S$4.20.
UBS' Mr Chang raised the price target of Neptune's shares to S$4.8 and also increased the earnings estimates for the current year and the next.
Neptune posted its smallest quarterly profit in four years in Q4, as lower rates eroded gains from higher volumes.
Net income fell 64 per cent to US$42.7 million from a year earlier. Sales were little changed at US$1.9 billion. That was the smallest profit since Q1 2003.